Legislation Document

SPONSOR:

Sen. McDowell & Sen. Cloutier on behalf of all Senators & Rep. Hensley & Rep. Paradee on behalf of all Representatives

DELAWARE STATE SENATE

149th GENERAL ASSEMBLY

SENATE JOINT RESOLUTION NO. 2

URGING THE FEDERAL ENERGY REGULATORY COMMISSION TO ACCEPT EITHER OF PJM INTERCONNECTION, L.L.C.’S ALTERNATIVE METHODOLOGIES FOR ALLOCATING THE COST OF THE ARTIFICIAL ISLAND PROJECT AS RECOMMENDED BY GOVERNOR CARNEY AND GOVERNOR HOGAN.

WHEREAS, PJM Interconnection, L.L.C. (PJM) is the regional transmission organization that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia; and

WHEREAS, PJM has identified the need for a new transmission line across the Delaware River connecting Artificial Island to Delaware (the Artificial Island Project); and

WHEREAS, the purpose of the Artificial Island Project is to address stability issues at the Salem and Hope Creek nuclear power facilities, not to address supply deficiencies within the Delmarva Peninsula; and

WHEREAS, the majority of the load savings of this project are allocated regionally outside the Delmarva Zone; and

WHEREAS, the estimated total cost of the project is $278 million; and

WHEREAS, PJM allocated the cost of the Artificial Island project using a solution-based distribution factor (SBDFAX) methodology, which resulted in customers in the Delmarva Zone being responsible for paying over 90% of the cost of the Artificial Island Project despite receiving miniscule benefits from it; and

WHEREAS, Delaware’s Congressional delegation, the Delaware and Maryland Public Service Commissions, the Delaware Division of the Public Advocate, the Maryland Office of the People’s Counsel, Old Dominion Electric Cooperative, LS Power, and other stakeholders have challenged the current Distribution Factor (DFAX) cost allocation for the Artificial Island project in proceedings pending before the FERC in Docket No. EL15-95-000;

WHEREAS, in the recent decision by the U.S. Federal Energy Regulatory Commission (FERC) on April 22, 2016 in Docket No. EL 15-95-000, the FERC decided not to modify the SBDFAX methodology used to allocate the Artificial Island Project costs, despite evidence presented by the Delaware Public Service Commission (PSC) showing that the SBDFAX formula places an undue and unfair burden on Delaware consumers and businesses; and

WHEREAS, the FERC’s decision will require Delaware, and other residential and commercial customers on the Delmarva Peninsula, to pay for more than 90 percent of the costs of the Artificial Island Project; and

WHEREAS, the Delaware and Maryland Public Service Commissions, the Delaware Division of the Public Advocate, the Maryland Office of the People’s Counsel, Old Dominion Electric Cooperative, LS Power, and other stakeholders have filed requests for rehearing, which the FERC granted on June 21, 2016; and

WHEREAS, if the FERC’s Order stands, the average Delaware residential customer will pay an additional $2 to $4 on their monthly electric bills; and

WHEREAS, on June 9, 2017, PJM publicly released two alternative cost allocation methodologies that would result in Delmarva Zone customers paying between 6% and 10% of the total costs of the Artificial Island Project, and allocating the majority of the costs to zones that will experience the most benefit from the Artificial Island Project;

NOW, THEREFORE:

BE IT RESOLVED by the Senate and the House of Representatives of the 149th General Assembly of the State of Delaware, with the approval of the Governor, that the State of Delaware urges the FERC to accept either alternative methodology presented on June 9, 2017 by PJM as a fairer and more reasonable cost allocation solution to a stability problem that is region-wide, thereby allocating just and reasonable costs across the regions to which the Artificial Island Project provides benefits.

BE IT FURTHER RESOLVED that suitable copies of this resolution be sent to the Delaware Public Service Commission, the Delaware Division of the Public Advocate, the FERC, and PJM.